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Will Trump and US Supplies Drive Crude Oil Futures?

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Updated

US crude oil futures  

WTI (West Texas Intermediate) crude oil (UCO) (XLE) (USO) futures contracts for June delivery rose 0.84% and closed at $49.07 per barrel on May 17, 2017.

Crude oil futures are near a two-week high due to the following:

  • fall in US crude oil inventories for the sixth straight week
  • fall in gasoline and distillate inventories
  • Saudi Arabia and Russia favored extending the production cut deal for nine more months
  • rise in US crude oil production for the first time in 13 weeks
  • rise in US refinery crude oil demand for the first time in three weeks

President Trump and the US dollar 

The US dollar (UUP) fell 0.5% to 97.46 on May 17, 2017. So far, it’s down 1.6% this week, while it’s down 6% from its peak in January 2017. The US dollar has erased post-elections gains. Uncertainty about President Trump’s ability to deliver on tax reforms and fiscal stimulus pressured the dollar and US stock markets. The S&P 500 (SPY) (SPX-INDEX) and Dow Jones fell 1.8% and 1.7% on May 17, 2017—the worst percentage decline since September 2016. However, the S&P 500 and Dow Jones rose more than 10% after the US election.

The weak dollar supported oil prices on May 17, 2017. However, rising production from Libya and Nigeria could pressure oil prices. Moves in crude oil prices impact oil and gas producers’ earnings like Northern Oil & Gas (NOG), ExxonMobil (XOM), Denbury Resources (DNR), and Cobalt International Energy (CIE).

In this series 

In this series, we’ll look at US crude oil production, refinery demand, imports, and inventories. We’ll also look at gasoline and distillate inventories.

We’ll start by looking at US crude oil prices in early morning trade on May 18, 2017.

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